Harvard Case - Stork Home Fernandez Hospital: Going to Market with a Purpose-Driven Disruptive Innovation
"Stork Home Fernandez Hospital: Going to Market with a Purpose-Driven Disruptive Innovation" Harvard business case study is written by Ramakrishna Nidumolu, D.V.R. Seshadri, Ratan Jalan. It deals with the challenges in the field of Strategy. The case study is 21 page(s) long and it was first published on : Aug 22, 2019
At Fern Fort University, we recommend that Stork Home Fernandez Hospital (SHFH) adopt a multi-pronged strategy to successfully launch its disruptive innovation and achieve sustainable growth. This strategy involves:
- Rapidly scaling up the pilot program to demonstrate the effectiveness and scalability of the model.
- Developing a robust marketing and communication strategy to build awareness and trust among target audiences.
- Leveraging technology and analytics to optimize operations and personalize patient experiences.
- Building strategic partnerships with key stakeholders in the healthcare ecosystem.
- Establishing a strong corporate social responsibility framework to solidify SHFH's commitment to its mission.
2. Background
Stork Home Fernandez Hospital (SHFH) is a non-profit hospital in the Philippines facing a critical challenge: the country's high maternal mortality rate. This is exacerbated by limited access to quality healthcare, particularly in rural areas. SHFH's response is a disruptive innovation: a home-based birthing program that leverages technology and a network of trained midwives to provide safe and affordable birthing care.
The case study focuses on the challenges SHFH faces in launching this program, including funding, operational logistics, and building trust with potential beneficiaries. The main protagonists are Dr. Fernandez, the hospital's CEO, and the team responsible for developing and implementing the program.
3. Analysis of the Case Study
SWOT Analysis:
- Strengths: SHFH's mission-driven approach, its strong reputation in the community, and its existing network of trained midwives.
- Weaknesses: Limited resources, lack of brand awareness, and potential challenges in scaling up the program.
- Opportunities: Growing demand for affordable healthcare, increasing adoption of technology in healthcare, and government initiatives to improve maternal health.
- Threats: Competition from traditional healthcare providers, potential regulatory hurdles, and the risk of negative publicity.
Porter's Five Forces:
- Threat of New Entrants: High, due to the relatively low barriers to entry in the home-based birthing market.
- Bargaining Power of Buyers: High, as patients have multiple choices for birthing care.
- Bargaining Power of Suppliers: Low, as SHFH can leverage its existing network of midwives and negotiate favorable terms with suppliers.
- Threat of Substitute Products: High, as traditional hospital-based birthing remains a viable alternative.
- Rivalry Among Existing Competitors: Moderate, as SHFH faces competition from both traditional hospitals and other home-based birthing programs.
Value Chain Analysis:
SHFH's value chain includes activities such as:
- Inbound Logistics: Procurement of medical supplies and equipment.
- Operations: Training midwives, managing the home-based birthing program, and providing post-natal care.
- Outbound Logistics: Transporting patients to hospitals in case of emergencies.
- Marketing and Sales: Raising awareness about the program and attracting patients.
- Service: Providing high-quality birthing care and support.
Business Model Innovation:
SHFH's business model is based on a disruptive innovation strategy. It leverages technology and a network of trained midwives to provide a low-cost, high-quality alternative to traditional hospital-based birthing. This model has the potential to disrupt the existing healthcare market by:
- Lowering the cost of care: By providing care in the home, SHFH can reduce the costs associated with hospital stays.
- Improving access to care: The program is designed to reach underserved communities that may not have access to traditional healthcare facilities.
- Enhancing patient experience: The home-based setting can provide a more comfortable and personalized birthing experience.
4. Recommendations
1. Rapidly Scale Up the Pilot Program:
- Expand the program to new geographic areas: Focus on areas with high maternal mortality rates and limited access to quality healthcare.
- Increase the number of midwives involved: Recruit and train additional midwives to meet the growing demand.
- Develop a robust data collection system: Track key metrics such as patient satisfaction, cost per delivery, and health outcomes.
2. Develop a Robust Marketing and Communication Strategy:
- Target specific audiences: Focus on pregnant women in rural areas, particularly those who are underserved by traditional healthcare providers.
- Utilize a multi-channel approach: Leverage social media, community outreach programs, and partnerships with local NGOs to reach target audiences.
- Develop compelling messaging: Highlight the benefits of the program, such as affordability, safety, and convenience.
3. Leverage Technology and Analytics:
- Implement a telemedicine platform: Enable midwives to connect with patients remotely for consultations and monitoring.
- Use data analytics to optimize operations: Identify areas for improvement, such as patient flow, resource allocation, and cost management.
- Develop a mobile application: Provide patients with access to information about the program, appointment scheduling, and health resources.
4. Build Strategic Partnerships:
- Collaborate with local NGOs: Partner with organizations working in maternal health to reach a wider audience.
- Engage with government agencies: Seek support from local and national governments to expand the program and promote its adoption.
- Establish partnerships with pharmaceutical companies: Secure access to affordable medications and supplies.
5. Establish a Strong Corporate Social Responsibility Framework:
- Develop a clear mission statement: Articulate SHFH's commitment to improving maternal health and reducing maternal mortality.
- Implement ethical sourcing practices: Ensure that all supplies and services are obtained from responsible suppliers.
- Promote transparency and accountability: Publish data on program outcomes and financial performance.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of SHFH's internal and external environments, considering:
- Core competencies and consistency with mission: The recommendations align with SHFH's mission to improve maternal health and its core competency in providing high-quality healthcare.
- External customers and internal clients: The recommendations address the needs of pregnant women in underserved communities and the challenges faced by SHFH's staff.
- Competitors: The recommendations aim to differentiate SHFH from its competitors by offering a unique value proposition based on affordability, accessibility, and quality.
- Attractiveness: The recommendations are expected to generate positive financial returns, improve access to care, and enhance patient satisfaction.
6. Conclusion
By implementing these recommendations, SHFH can successfully launch its disruptive innovation and achieve sustainable growth. The program has the potential to transform maternal healthcare in the Philippines, improving health outcomes and saving lives.
7. Discussion
Alternatives:
- Focusing solely on the pilot program: This would limit the program's impact and delay its scaling up.
- Adopting a traditional hospital-based model: This would not address the needs of underserved communities and would be more costly.
Risks and Key Assumptions:
- Risk of negative publicity: SHFH must ensure that the program is implemented safely and effectively to avoid negative media coverage.
- Assumption of government support: SHFH needs to secure government funding and regulatory approval for the program to succeed.
- Assumption of patient acceptance: The program needs to be perceived as safe, effective, and convenient to attract patients.
8. Next Steps
Timeline:
- Year 1: Scale up the pilot program, develop a marketing and communication strategy, and establish strategic partnerships.
- Year 2: Implement technology solutions, expand the program to new geographic areas, and monitor program outcomes.
- Year 3: Evaluate the program's impact, refine the business model, and seek additional funding.
Key Milestones:
- Launch of the expanded program: Q1 2024
- Development of the telemedicine platform: Q2 2024
- Publication of program outcomes: Q4 2025
By taking these steps, SHFH can position itself as a leader in the home-based birthing market and make a lasting impact on maternal health in the Philippines.
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Case Description
Fernandez Hospitals (FH) was a unique health services organisation focused on women and newborns, based in Hyderabad, India. Its vision was to promote natural childbirth and respectful maternity care across India, make pregnancy safe for women and their babies, promote midwifery training and birth without interventions, and to always lower costs for patients. A strong advocate of natural birth, FH's Chief Executive Officer, Dr. Evita Fernandez, had long opposed the growing trend of caesarean section (C-Section) births that had largely been driven by private hospitals across the country seeking to maximise their profit margins. Since 1990s, as the country's economic growth surged, women from the affluent classes, as well as educated working women, had emerged as a large and growing segment that could pay premium prices for high-quality maternity services that also provided a premium experience. Given FH's reputation as a caring institution in the field of obstetrics, gynecology, neonatal care and allied areas, FH made the decision in 2016 to establish Stork Home as a hospital in the upscale neighborhood of Banjara Hills that would cater to the premium maternity services segment of Hyderabad. However, even after two years of operations, Stork Home was languishing in terms of low inpatient occupancy and poor financial performance, which was also affecting the profitability of FH as a whole. It seemed that good intentions had run aground on the harsh shores of a highly competitive landscape. The case delves into the causes of poor performance, contrary to the expectation that FH's ability to attract patients would carry over to the premium Stork Home brand. The case poses a series of questions centering around the future 'go-to-market' strategy for Stork Home. These questions are posed against the backdrop of intense competition from well-established large hospital chains with aggressive marketing efforts and a focus on maximising profits.
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